Often times, when one is starting a budget, it can be overwhelming. How detailed should I get? Do I need to label every purchase? What if I miss something? All of these questions can inhibit us from coming up with a spending plan. The following is how I was able to get on a budget. It is not overly detailed.

I first figure out how much I actually bring home each month. If you are salary, this should be pretty easy. Just look at your paystubs. If hourly, it will take a little more work, but nothing too hard. Lets assume you are paid every two weeks. Take that amount and multiply by two. This is not exact, but will give you a good idea to start with.

Now for the deed. I have my budget divided into six categories. First is savings. This can be an emergency fund, IRA, or anything that you are taking out and putting back for later use. Next is regular debt/bills. Rent, utilities, and phone are examples of this. Basically anything that is always going to be there from month to month. Then we have debt. This is the stuff we hate and work over time to eliminate. Credit Cards, Car Loans, other loans, and basically anything we borrowed money for. Next we have food. Just sit and figure out how much it costs you to eat each day, breakfast, lunch and dinner. This isn’t hard if you sit and think about everywhere you eat and how much you have spent on groceries. Now we have our lovely Gas bill. Yes, this is a beast now days as the price always spikes when a bird sneezes in the Gulf of someone in the Middle East stumbles over a stone. However, you can get a pretty good guess at how much you spend each week and then expand that out to a month. Finally, you have your entertainment/misc category. This is your weekend fun money. Money you have set to the side and saved for on any item you have decided you need/want.

With all of those categories, I write out each item and the amount next to them. With each one, I subtract it from my monthly take home income. Then you have a good idea of what you are doing. Then, you can plan out each week from this. I find it a good idea to take half an hour at the beginning of each week and plan out what I need to spend. If you take these steps and build this habit, you can start identifying areas where yu can cut back and save a little more.

This sounds simble and boring huh? Well, it is both. But it doesn’t take long. If you do this and start SLOWLY cutting back, you will be doing what we all need to be doing, spending less than you make. Don’t rush this. Be patient and you can turn this around. If I did it, anyone can.